Entries for Investment in Bonds, Interest, and Sale of Bonds

Gonzalez Company acquired $153,000 of Walker Co., 8% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $50,400 of the bonds for 97.

Journalize entries to record the following in Year 1:

For a compound transaction, if an amount box does not require an entry, leave it blank.

a. The initial acquisition of the bonds on May 1.

May 1.

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b. The semiannual interest received on November 1.

Nov 1.

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c. The sale of the bonds on November 1.

Nov 1.

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d. The accrual of $1,368 interest on December 31.

Dec. 31

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